M&C Saatchi restructure sees profitability rise by 294%

The sell-off of non-core and loss-making businesses at M&C Saatchi contributed to a 294.7% increase in profitability in 2024, according to the company’s full-year results.

Operating profit increased to £22.5 million (US$29.1 million) in 2024, from £5.7 million ($7.4 million) in 2023, against the backdrop of a restructure and the disposal of non-core and loss-making businesses across France, Indonesia and Switzerland. Operating profit margin increased from 2.4% to 9.7% over the period.

Like-for-like operating profit, which strips out the effects of currency exchange, one-off and exceptional items, rose 5.2% over the same period to £35.2 million ($45.6 million), with like-for-like profit margin rising slightly from 15% to 15.2%.

Net revenue, which strips out pass-through costs, rose 3.7% to £231 million ($299 million).

Zaid Al-Qassab, group chief executive of M&C Saatchi, who joined last year, told Campaign the company had disposed of “a number of small or loss-making or non-core businesses last year, that included some businesses in France, in Indonesia, in Switzerland. And we also disposed of our South Africa business last year, and that business became a licensee, so we still work with them.”

He added: “I think we're focused on where there are opportunities for growth and making sure our investment is in those places. So it's certainly a strengthening of the fundamentals.”

Non-advertising specialisms, which include Issues (public sector work), Passions and PR (including Sport & Entertainment), Consulting and Media now account for 67% of net revenues, compared to 60% in 2023.

Net revenue for non-advertising specialisms grew 6.7% to £153.6 million ($198.9 million), while advertising shrank by 1.9% to £77.4 million ($100.2 million).

Al-Qassab said the shift away from advertising “reflects modern marketing and modern client needs. 

“We've got two thirds of our business in the things we call non-advertising specialisms. Those are higher margin businesses that are highly in demand, and they grow very strongly. Advertising remains important. It's the shop window for our services, because it's very visible. But the mix is shifting.”

Earlier in March M&C Saatchi announced the Cultural Power Index tool, created by M&C Saatchi Consulting, that defines brands' cultural impact by analysing data signals from across media, social and cultural landscapes to measure “cultural power” in real time.